Brace yourself for increase in costs of owning or renting a home
ACROSS the country, and especially in Dublin, 2013 and 2014 will be remembered as the years in which the cost of owning or renting a home increased greatly and impacted beyond reason on our personal finances.
The coming year will likely see water charges added to property tax and domestic fuel price increases. The sale of An Bord Gais to a company which has already hiked the cost of domestic gas in Britain will fuel fear of further heating cost rises.
Meantime, prices in Dublin will continue to rise at 1.1pc per month -- or €3,300 per month -- on the cost of a house worth €300,000 today.
Galway and Cork cities are now increasing at healthy and moderate levels.
Agents now believe these locations will experience a more sustainable 5pc growth next year and according to DNG, one of Ireland's two largest estate agencies, moderate price growth will be also experienced next year in those high population centres outside of the big cities such as Kilkenny, Sligo and Ennis.
By 2016, when we next have to sit down to re-evaluate our homes for property tax, there is a strong chance that those of us who live in the greater Dublin area will be paying one-third more thanks to the increasing values of our homes over the three years from March 2013 to March 2016.
What this means is that those first-time buyers who acquire homes will have to service a larger mortgage, pay more in property tax, pay more in heating charges and pay more in water charges.
The cost of a roof over our head is increasing at a worrying rate, yet with wages generally not increasing, we as a nation are spending increasingly more acquiring and maintaining our homes.
As a result, we will be spending less of our salaries in restaurants, pubs, local shops and on domestic holidays -- spending which drives the economy overall.
The increasing net cost of housing is also a big consideration to those multinationals who have based themselves in Ireland and who make up such an important component of our economy. There are already mutterings that workers who locate here are being taxed beyond what is reasonable.
The increasing net cost of the roof over our heads, particularly in Dublin, the country's economic engine, therefore might deter foreign professionals from coming here at the behest of their multinational employers.
Property prices can become a sponge that soaks up spending and deters investment which could go into enterprise.
Therefore, rising prices are bad -- for the American executive deterred from coming to Dublin because the rent is too high, and for his multinational employer who has to employ the second-choice candidate.
They are also bad for the first-time buyer who has to choose a smaller home for their future family, or else pay out a greater proportion of their salary for 30 years, and for the estate agency firms which have their existence put at risk by the resulting bubbles.
It wouldn't take much to enable the building of more houses -- but we need at least 10,000 per annum.